Oct 19, 2012

(AJC) --- Morehouse College says it will furlough faculty and staff and make other budget cuts because of a drop in enrollment.

The Atlanta college is teaching 2,360 students — about 125 fewer than projected, Interim Provost Willis Sheftall said Thursday. He attributed the drop to the sluggish economy and changes to a federal loan program that has led to enrollment declines at historically black colleges around the country.

Normally about 8 percent of Morehouse students who pay a deposit to attend don’t enroll, but it doubled to 16 percent this year, in part because of the new loan rules.

“This is a challenge, no question about that,” Sheftall said. “But it is not a crisis.”

Colleges across the country have reported an increase in loan denials after the U.S. Department of Education tightened standards for the Parent Loan for Undergraduate Students. Prospective borrowers can’t have any defaults, foreclosures, bankruptcies, tax liens or wage garnishments within the past five years.

The department has said the tighter regulations protect taxpayer money and prevent people from accumulating debt they can’t afford.

Unlike other federal loans there is no cap for this program and parents can borrow enough money to pay the full cost for their children to attend college. Nearly 1 million families borrowed more than $10 billion last year.

Locally, Clark Atlanta University and Spelman College also say enrollment dropped in part because of the new rules.

Loan denials at Clark Atlanta increased from 25 percent last year to more than 65 percent this year, President Carlton Brown said in a statement.

The university’s enrollment dropped by 443 students to 3,400 this fall. As a result the school has cut travel and other spending, and all requests to fill positions will be vetted through the Enrollment Crisis Committee, Brown wrote.

“We will, where possible, pursue contractual reductions,” he said.

Spelman’s fall enrollment dropped by a dozen students to 2,074 this fall. That’s above the school’s 2,050 target and the college doesn’t expect to adjust its budget. Spelman provided additional scholarships to students who were denied the federal loan.

Morehouse plans to increase fundraising efforts so it can offer more scholarships and grants to students whose families are denied a PLUS loan, Sheftall said.

To cut spending the college plans “no more than five furlough days,” he said. Most faculty and managers will take their days during spring break while other staff spread their days throughout the budget year, he said.

During the spring semester Morehouse will reduce the number of part-time faculty, which Sheftall said could increase the number of students in some classes and give students fewer course sections to choose from.